2 banks weather tough times Bancorp income off slightly

Provident up

Despite the problems plaguing the banking industry, net income for Baltimore Bancorp dipped only slightly in the first quarter while earnings at Provident Bankshares Corp. jumped by 24.6 percent.

Baltimore Bancorp, the parent of the Bank of Baltimore, reported first quarter earnings of $5.08 million, or 40 cents a share, compared with $5.1 million, or 40 cents a share, for the same period a year ago.

"We are pleased to report these earnings during a difficult period of economic weakness," Harry L. Robinson, Baltimore Bancorp's chairman and chief executive officer, said in a prepared release.

Robinson also said that problem loans appear to have leveled off since the end of 1990. "Our current reserves and increased capital position, which amounts to about 7.25 percent of assets, provides an appropriate cushion in these uncertain times," he said.

Total assets for the bank-holding company were $3.31 billion at the end of March, a 4.4 percent decrease from a year ago.

Provident, the parent company of Provident Bank of Maryland, had a first quarter net income of $815,000, or 14 cents a share, compared with $654,000, or 11 cents a share, earned in the 1990 first quarter. The first quarter also was the third consecutive profitable quarter for the bank.

However, the company cut its quarterly dividend from 10 cents a share to 5 cents under a new policy of tying the payment to earnings.

The reduced dividend is payable May 9 to holders of record April 29.

At Provident's annual meeting yesterday, Carl W. Stearn, chairman and chief executive officer, told shareholders that the 5 cent dividend is the result of December decision by the board of directors to peg dividends to earnings. "It is very important that -- some of the profits be returned for future needs," Stearn told shareholders.

Since it became a public company in 1987, Provident has consistently paid a quarterly dividend of 10 cents a share even when the company lost money. In the last four years, the only profitable year for Provident was 1989 when it earned $3.5 million, or 57 cents a share.

After the meeting, Stearn said that future losses would not necessarily preclude dividend payments because other factors

might be considered. But he added, "we are not anxious to pay out dividends without earnings."

The 5-cent dividend is about 37 percent of Provident's earnings. Stearn said most corporate dividends are 20 to 40 percent of earnings.

Provident last year lost $3.9 million as it boosted its provision for possible loan losses to cover souring commercial real estate loans.